Buying a Rental Investment in Orlando
Buying a rental investment in Orlando
Having a rental investment in Orlando is good for landlords. Long Term Rental rates increased 4% over last year, and are expected to continue upwards. The down turn in the housing market and economy has created more renters than home buyers. Rental vacancy rate is low, as demands are high. Being a landlord in a renters market is considered desirable.
Central Florida’s population is growing along with enrollment at the local colleges and universities.
Foreclosures, short sales, and tight credit has resulted in more homeowners becoming renters. This change is benefiting the landlords that own rental property.
Even though prices of rental property have increased, there are still excellent opportunities for rental investment in Orlando. While the rental demand is high, buying a rental investment in Orlando is not always smooth sailing.
If you are looking to buy an investment property, having an Exclusive Buyers Agent on your side, is a BENEFIT. 407-539-1053
Considerations for rental investment in Orlando
When considering a rental investment in Orlando you have to consider both the pros and cons. Location, property type, condition of property, expenses and revenue all effect the net income to the landlord.
Location: Rental properties are located in every area of Central Florida. There a certain areas that are rentals are more saturated, such as Lake Nona, Downtown Orlando, and University of Central Florida area. Some areas are in more demand than other areas and therefore carry a higher rental rate.
Property Type: Condos or Town homes are easier to maintain because the HOA maintains the exterior of the properties. In single family homes, you are required to maintain the exterior of the property, including the grounds. Single family homes are probably easier to rent, however there may be more people occupying the residence including some pets.
Condition of Property: For those buying a rental property there will always be some level of fixing up needed before the property is ready to rent. It could be just paint and carpet, or or maybe a total renovation. You have to consider the expense of acquiring the property and the cost to get it into top condition. The nicer the property, the more it will rent for.
Expenses: Taxes, Property Insurance, HOA fees, ongoing property maintenance, and any mortgage payments are all considerations. If you have a mortgage on the property it may difficult for you to break even. If you are living outside of Central Florida you will need to hire a property manager to find a tenant and manage your rental at an additional cost to you. Most prospective landlords forget to factor in holding costs. There will be a vacancy factor that costs you when the property is unoccupied between tenants. That could be a 1 to 2 month vacancy…or longer.
Revenue: Rental income is based on the property, location, condition, and time of year. How long will you hold the property vacant? will the rent appreciate? Certain times of year it is more difficult to find a tenant quickly. Tenants don’t move around much during the holidays or school year.
Long Term vs. Short Rental investment in Orlando
Long Term Rental (12 month lease) demand follows the changes in the economy. Short term rental (weekly or monthly) demand follows hotel occupancy with the vacation market. However, there are differences when considering Long Term or Short Term rental investment in Orlando. Short term rental rates are higher than a long term rental lease.
|LONG TERM RENTAL||SHORT TERM RENTAL|
|REVENUE:||Lower – Fixed||Higher-Variable|
|UTILITIES:||Tenant Pays||Landlord Pays|
|LEASE DURATION:||7 to 12 months||Daily to Weekly|
|LOCATION:||Anywhere||Areas Zoned for Short Term Rental|
When buying a rental investment in Orlando, it is wise to hire a home buyer expert at Buyers Broker of Florida to guide you through your rental investment in Orlando. 407-539-1053